The Income Tax department spent over Rs 58,500 crore in the last nine years on interests for delayed tax refunds without due approval from the Parliament, the Comptroller and Auditor General of India said on Tuesday.

In a report tabled in the Parliament, the CAG said the Central Board of Direct Taxes and the Finance Ministry had not made budgetary provisions for these interests.

“As in the past, no budget provision for interest on refunds was made in the budget estimates for the financial year 2016-’17 and expenditure on interest on refunds amounting to Rs 2,598 crore was incurred by the department, in contravention of provisions of the Constitution and in disregard of the recommendations of the public accounts committee,” the auditor’s office said in its report.

The tax department classifies interests on delayed refunds of excess tax paid as a reduction in revenue, instead of an expense, even though the CAG has criticised this practice repeatedly.

The CAG also pointed out that the department had made “exaggerated” tax demands on large corporate firms and later refunded them.